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Taking Proper Responsibility for Losses–November 10, 2008

We see the emergence of the remnants of the mortgage brokerage industry, arising to now serve perhaps anyone who wants to claim a piece of the bailout in regard to their own mortgage. It’s not yet completely clear how one will qualify to get his/her rate or principal amount reduced, but here’s the fear: That lots of people will try to get a piece of it, because it’s available, not because they were in any way deceived by their lender or duped into buying that house, but just because it’s available. And what the government could do to exacerbate that is to accommodate just about anyone who feels somehow disadvantaged by the economic crisis.

We’re not saying those who are in trouble should not be helped, but the danger of all this is clear–that all of us try to get a piece of it, because it’s not fair that some people are getting it and I’m not “getting my share,” regardless of whether I “could” eventually repay my full debt–as indeed I fully agreed to do, and for which I am entirely responsible to do.

Seems to us that if we should need a period of reduced payments, even moratorium, that’s one thing–but we should be required to pay it all back–principal and accrued and deferred interest, over time. If that standard is maintained, except in situations where there was deceit, it would substantially reduce the amount of attempted negotiation, the amount of waste, and the amount of later feelings of unfairness.

That’s how we feel about it–we borrowed it, we knew the risks, we knew what we were doing. Now our home is worth less, but that’s not something the government promised to protect us against, and not something we want the government doing for others.